Samir Saran

More than three years after the Paris Agreement was finalised at COP21, it is evident that the developing world is unlikely to receive even the modest amount of US$100 billion annually in climate finance by 2020. This is primarily a result of the collective failure of the developed world to meet their moral and real climate obligations that pre-date the Paris Agreement. This lack of finance for climate action is exacerbated by the fact that the international financial community—banks, asset managers, investors and capital markets—have failed to align their operations with the goals of the Paris Agreement. The involvement of international financial investors, both private and multilateral, in financing green transitions in developing countries has so far been feeble, sporadic and arbitrary. Unless these resources can be leveraged to cater to the development needs of emerging economies, there is a real possibility that the green transitions that we all seek will be incomplete and mostly underwritten by the world’s poorest citizens.

For the past two years, ORF and the MacArthur Foundation have attempted to create a new framework to ensure that the global financial community better responds to the imperatives of the Paris Agreement. Our research acknowledges that official aid and grants are insufficient to meet the burgeoning energy and infrastructure needs of emerging economies. There is no doubt that we require new financial instruments and pipelines to support sustainable development in much of the world. This publication, comprising of 11 policy essays on the subject of climate finance, discusses this objective through multiple lenses. It is a culmination of our efforts to work with a global network of experts and stakeholders to identify bottlenecks and provide new solutions to ensure that emerging economies can access finance to meet their green development goals.

Our series on financing green transitions has largely focused on India, and for good reason: It will be the first large country that must transition to a middle-income economy in a fossil fuel-constrained world. India is also constricted by the same political, regulatory and financial challenges that confront much of the developing world. Given the weak efforts of the developed world to assist the developing countries so far, India has had to chart a path largely through its own economic and financial arrangements. Therefore, an assessment of India’s capacity to now leverage international financial flows and its ability to undertake a low-carbon transition may well provide a reliable template for developing countries to emulate.

Through 11 essays, we explore three broad themes: the role of international investors and institutions; India’s own development policy choices and lessons therein for other developing countries; and the role of human capital in climate-resilient investment.

Our first set of essays analyses the behaviour and financial practises of international financial institutions, investors and credit rating organisations. In “An Incomplete Transformation”, Mihir Sharma argues that Multilateral Development Banks have failed to create bridges between private capital and clean energy/climate resilient infrastructure demands in developing countries. He calls on MDBs to adapt to developing world priorities, crowd-in private capital, and streamline operational activities in emerging economies. In “Financing Climate Resilience”, Vikrom Mathur and Aparna Roy highlight the bias of international investors towards investing mostly in mitigation efforts. Conventional wisdom in the private sector holds that the costs of adaptation and resilience should be borne by governments. Taking a different approach to the problem, Mathur and Roy offer solutions focused on commercial and business opportunities. In two pieces, “Rating Resilience” and “Ratings for Renewable Energy”, Aled Jones studies the limitations of current literature and practices relating to credit rating of infrastructure projects and renewable energy projects and proposes a more holistic framework of risk metrics for both renewable energy and climate resilient infrastructure. Finally, in “The Political Economy of Basel”, Mihir Sharma outlines how the Basel norms have been designed to respond to the interests of a select group of developed nations. He argues that by prioritising macroeconomic stability and implementing new liquidity restrictions, these actors have failed to consider adverse implications on cross-border flows, especially with regards to long-term green investments.

The next set of essays focuses on India’s domestic challenges, particularly in its infrastructure and urban development policy and its efforts to transition to a low-carbon economy. In “PPP model, regulatory oversight and private financing: Evolutionary trinity of India’s infrastructure”, Gautam Chikermane offers a comprehensive historical account of the political economy of India’s infrastructure policy, documenting the many failures that have plagued it. Given that a stable infrastructure policy will have significant implications for green investment choices, Chikermane’s study of India’s policy failures provides valuable lessons. In “Financing Urban Infrastructure for an Evolving India”, Pritika Hingorani, Sharmadha Srinivasan, and Harshita Agarwal examine the reasons for the lack of private-sector involvement in India’s climate-resilient urban infrastructure. They analyse the current regulatory regime for urban infrastructure in India and provide a set of solutions, advancing both public and private sector participation in the future. In “Moving from Growth to Development: Financing Green Investment in India”, Neha Kumar, Prashant Vaze and Sean Kidney explore new financial instruments that India can employ to finance its green infrastructure needs. They outline how India can more effectively scale its green bonds market, leverage international debt capital markets, and harness blended finance to achieve this objective. Finally, in “India and the World,” Aparajit Pandey and I outline three key structural barriers that threaten to undermine India’s rapidly growing green energy sector: the state of its distribution companies, underdeveloped financial markets and inflexible international credit and risk assessment practices. Offering case studies from India’s state and municipal level policies, we argue that India’s ability to succeed in its low-carbon transition will open new pathways for emerging economies around the world.

In our final set of essays, we examine the role of human capital in enabling greater green investment, focusing on leadership and gender. In “Pay for Sustainable Growth”, Charanjit Singh, analyses the executive pay of 31 of India’s top companies showing that by linking management compensation to short-term performance objective, companies are failing to integrate sustainability objectives into their long-term vision. The chapter proposes a restructuring of the private sector’s approach to executive compensation, focused on long-term sustainable economic growth. Lastly, in “Gender and Climate Finance,” Vidisha Mishra posits that even though women and marginalised groups are likely to be more exposed to climate change related risks, they are severely underrepresented in the investment and regulatory classes. Her essay then unpacks the opportunities and benefits of meaningfully building gender concerns into climate finance mechanisms.

Our contributors have attempted to explore the reasons behind the significant shortfall in private finance in relation to low-carbon investments. They have also collectively offered solutions, both domestic and international, with regards to the flow of finance for climate projects. The success of these solutions, however, will be predicated on some boundary conditions that developing economies and the international financial community must meet.

First, developing countries must reclaim the power grid. The large-scale subsidisation of power in the developing world has created significant distortions in energy use, pricing and policy. State-level reform in India suggests that splitting the electrical grid for agricultural and non-agricultural sectors, implementing a credible metering system and providing subsidies as direct benefits can have significant positive effects on the power sector. Without a viable grid, green investments are likely to remain unviable.

The second is to build capacity amongst international investors to understand risk and opportunity in developing states. There is generally a bias stemming from lack of knowledge (information) and capacity (human resources) to assess risks in emerging economies. This ultimately translates into an inability to understand the economic landscape of recipient countries. Further, as one of our authors has highlighted, there are few institutional attempts at gendering climate investments and finance. A lack of female representation in the investor community, especially from the developing world, invariably means that the concerns and voices of the most vulnerable are ignored as financial plans are scripted.

Third, developing countries must build innovative policy tools to leverage new financial instruments and mechanisms. Currently, regulations related to debt and equity markets restrict the flow of international capital into climate action projects. Emerging economies must co-opt their financial sector in the fight against climate change. Financial markets that allow for debt financing and locally issued green bonds for example create a diverse set of instruments that different types on investors can rely on. More ambitious measures can include the creation of a “green investment bank,” which allow the crowding in of private investment in green assets.

Finally, there is a new imperative to overhaul regulatory systems around the world, both in recipient and investing states. Vast pools of money are held by multiple categories of investors, such as pension funds and insurance companies. However, existing regulations limit the ability of fund managers to invest in climate related projects. Further, international credit rating agencies reassess the methodology for assessments of green projects in developing countries. And perhaps most importantly, there is an urgent need to review the current set of Basel Accords as well as the next iteration of Basel IV accords. The macro-prudential regulations were designed to create a more risk-free international banking system but have unintentionally stymied the ability of the financial sector to contribute to climate resilience. The banking community must acknowledge that planetary risk is the largest systemic challenge to financial stability and that mitigating such risk is the most prudential practice.

While these solutions are far from comprehensive, they address some of the most persistent structural barriers to supplying and accessing climate finance. ORF and the MacAuthur Foundation will continue to explore new ways and means to ensure that developing countries can access financing to pursue their low-carbon transitions. We will also continue to study India’s own financial, technological and governance solutions in the hope that these experiences can benefit other countries and communities. We hope that the insights presented in this book will inform academics, business leaders and policymakers in their efforts to better understand the importance of the global financial community finally signing the Paris Agreement.

To read the full book, click here.

Samir Saran| Harsh V. Pant

Every year, the Raisina Dialogue convenes experts from a diverse cross-section of disciplines and professions to address the most challenging issues facing the global community. It is fair to say that for the past few years, the common sentiment is that we live in an age of “disruption,” given the upheavals that have characterized global politics over the last decade. As the dialogue prepares to convene once again in 2019, the world is evolving in response to these disruptions. Older systems of management are straining or already broken, but the new regimes, rules, and concepts that could replace them are still forming. This year, Raisina will take stock of the immediate consequences of these disruptions, and explore how these consequences inform our visions of the emerging world order.

The redrawing of our mental maps of the world is perhaps the most consequential development. The tensions and instability emanating from North America and Europe have reinforced the fragility of the Atlantic system: that it won’t be able to sustain its role as the lynchpin of the international order.

To read more, click here.

Samir Saran

Each successive year in the last decade has brought with it disruptions implicating global politics, economics and societies. At the Raisina Dialogue last year, we discussed how best to manage such disruptive transitions. This year, we believe that it is time to look ahead and search for new solutions and frameworks to manage the world. A “World Reorder” is our theme for Raisina 2019—and bold as it maybe, we have little doubt that the moment to reflect on this is already upon us.

The small community of nations that designed and sustained it must give way to a more diverse constellation of actors. New powers from the East are only one set of stakeholders—increasingly, global governance must allow for distribution of authority and agency to a more diffused networks of actors, from cities and citizens to corporations and civil society organisations. How we do this will be the key question of our time.

Consequently, we have chosen five themes that are defining a new world order. Perhaps the most consequential of these developments is the emergence of new strategic geographies that are transcending the old divides of East, West, North and South. Second, we analyse the discontent with today’s globalisation paradigms—and how new trade and technology tensions are threatening the future of connectivity and commerce. Third, we explore how technology is compelling us to search for a new contract between the individual, business and the state. Fourth, we ask what ethics will define the development and deployment of new technologies and how they will affect individuals and our societies. Finally, we emphasise the role of leadership—both individual and institutional—in managing the complexities of today’s world.

These are the big ideas that have influenced the design of the Raisina Dialogue 2019. Over the next three days, we have curated over 40 sets of interactions with a global community of leaders and experts in an attempt to paint a picture of a new world order that is rapidly emerging.

A prominent feature of this year’s conversation at Raisina is Europe or more broadly, Eurasia. This supercontinent is without doubt the most dynamic and unpredictable region in the world, one that continues to surprise itself and others around it. Once considered a benchmark for democracy and collective security, the EU is today increasingly roiled by the politics and economics of populism. Equally significant is that the geographical construct of the larger European continent is dissipating. New flows of finance, labour and information are merging Asia and Europe into a single Eurasian supercontinent. The question for the EU and other European actors, therefore, is whether they can act upon these momentous changes or be subsumed by them.

As climate change transforms the geography of the Arctic, its waters will merge the politics of the Pacific and the Atlantic Ocean, even as the regions’ incumbent powers scramble to create new arrangements. The Indo-Pacific, meanwhile, is already fast becoming a domain for great power competition. Yet, with over 60 percent of the world’s populations residing astride these waters, its potential for scripting new paradigms for globalisation and development is unparalleled. This begs the question, then, of whether these new constructs merely allow us to visualise and manage tensions in the region, or whether they can emerge as a new conduit for development and stability.

The emergence of these new geographies is no coincidence. They are symptoms of a new normal in global politics—the eastward tilt in the concentration of economic wealth and military might. Two prominent questions arise from this trend. For one, what does this mean for the West? Can the liberal international order remain viable even as Western values, norms and influence steadily decline in international affairs? Second, what is the future of governance in Asia? The rise of new powers and interests is necessitating the ideation of new norms and institutions; however, there is little consensus on how to go about this process as old tensions eclipse the potential for cooperation.

Both the US and China are exerting their influence upon the rules of trade and commerce—and technology is the flashpoint that may inject a new urgency and ferocity to this contest. This dispute is only one facet of the broader dissatisfaction buffeting the global economic order. The rise of non-market economies and the domestic compulsions of populism and nativist economics are threatening the very foundations of free markets and free trade. How will the economic order that has enabled much prosperity over the past seven decades adapt? More consequentially, what happens if it cannot?

Even as the very foundations of the global order stand on shaky ground, the world is still attempting to address the imperatives of sustainable development. Emerging economies are struggling to access and raise sufficient finance to fuel their sustainable development pathways, while trillions of dollars remain locked up in Western pension funds and insurance schemes. This hints at a deeper issue: that 20^th-century development paradigms continue to privilege a small set of actors and reflect their biases, preventing flows of technology and finance where they are most needed. Indeed, we must continue to ask how the global development agenda can be made more diverse by accommodating new voices. Engendering conversations on globalisation and development is certainly one solution; and it must form part of the template that includes underrepresented communities from around the world.

For many years, the world remained optimistic that new technologies would provide a voice to these communities and create new pathways for progress. Events in 2018 have compelled us to revisit this consensus. Balancing the imperatives of economic growth, national security and privacy seems harder than ever before. Democracies, it appears, are hard-pressed to achieve this, given that open societies are most vulnerable to manipulation and influence in their political processes. Worryingly, however, despite their outsized influence in our lives, global technology platforms have proven immune to calls for accountability and reform. This year, therefore, the Raisina Dialogue will ask how powerful technology companies can be made more accountable to the constituencies that drive their growth and profit. Or else must we rethink regulation that curtails their influence and reach?

There is, however, little doubt that technology will continue to transform our societies. The fourth industrial revolution will spur new breakthrough innovations and progress, even as it makes redundant extant arrangements for social mobility and economic growth. It will also compel us to reimagine the value of human capital. Our education, healthcare and labour frameworks must shed their 20^th-century formats and reflect the realities of today’s knowledge-based information economy. Further, societies will have to grapple with creating ethical frameworks for new technologies as they increasingly become essential to our politics, economics and military postures. In today’s polarised times, these tasks will not be easy.

In a world buffeted by multiple headwinds, it appears that we are experiencing a dearth of progressive leadership. How can individuals and institutions rise above the political divides that are inhibiting a new consensus?

Finally, we explore the role of India on the global high table. The opening lines of the Mahabharat, one of India’s oldest epics, boldly states that knowledge that eludes its pages may not be found elsewhere. It is fair to aver that India shares the same relationship with the world. Its billion-plus population is an embodiment of all that is right with the world and all that needs resolution. The challenges that it confronts are those that constrain all of us today. It is inexorably destined to be the steward of the liberal order with which it has had significant differences in the past. It is still emerging even as it leads, it raises hopes even as it disappoints. Indeed, India is a “boundary” nation. It is a living experiment where science and religion and identities and ideas intermingle to script a unique narrative of progress.

It is therefore an ideal location to dissect the most important issues that engage us all. It is on these boundaries that durable pathways for a world reorder will be discovered. This year, we have convened over 40 conversations to assess, analyse and argue these emerging realities. With 1,500 participants including 600 delegates and speakers from over 92 countries converging in New Delhi, there will be ample diversity and plurality of opinion. And our concerted efforts towards achieving gender parity have ensured that women account for over 40 percent of our delegates this year.

We hope that the Raisina Dialogue can be an incubator that generates new ideas for a shared planet and our common future; provide a space where contesting ideas can flow freely; and a platform where we may just tease out an elusive consensus. As always, we look forward to hosting you here in New Delhi.

Samir Saran

रायसीना डायलॉग में ORF प्रेसिडेंट समीर सरन का स्वागत भाषण।

Photolabs@ORF

• RAISINA 2019
• RAISINA DIALOGUE

नार्वे की प्रधानमंत्री महामहिम, सुश्री एर्ना सोलबर्ग;

भारत के माननीय प्रधानमंत्री, श्री नरेन्द्र मोदी जी;

माननीय विदेश मंत्री श्रीमती सुषमा स्वराज जी;

मंत्रिगणों, एडमिरल्स, जनरल्स और दुनिया भर से आए प्रतिष्ठित नेतागणों; तथा हमारे प्रतिनिधियों और प्रतिभागियों

रायसीना डायलॉग के चौथे संस्करण में आपका स्वागत है।

हमारे ऑनलाइन ऑडीअन्स का भी खासतौर पर अभिनंदन — मुझे बताया गया है कि पिछले साल उनकी संख्या 3 मिलियन से ज्यादा थी।

हमें उम्मीद है कि इस साल यह संख्या और भी ज्यादा होगी, क्योंकि इस बार हम रायसीना को मराठी और हिंदी में ट्वीट और कवर करेंगे तथा प्रतिदिन हिंदी में ‘बेस्ट आफ रायसीना’ वीडियो तैयार करेंगे।

मैं 92 देशों से आए 600 प्रतिनिधियों और वक्ताओं का हार्दिक स्वागत करता हूं, जो नई दिल्ली में हमारे साथ 50 घंटे की बहस और चर्चाओं में शामिल रहने वाले हैं। हमें इस बात की खासतौर पर खुशी है कि आज हमारे बीच काफी संख्या में वुमन लीडर्स और वक्ता मौजूद हैं — समस्त प्रतिनिधियों और वक्ताओं में से 40 प्रतिशत से अधिक महिलाएं हैं। अगले साल हम ​इस दिशा में बराबरी लाने की कोशिश करेंगे।

हमें अफ्रीका से पधारे 58 प्रतिनिधियों का स्वागत करते हुए हमें बेहद खुशी हो रही है — एक महाद्वीप, जिसकी आवाज को आवश्यक तौर पर हमारे भविष्य को बहुत अधिक प्रभावित करना चाहिए। हम अफ्रीका के साथ मजबूत रिश्ते बनाने के इच्छुक हैं — और 10 जनवरी को आप इस रोचक महाद्वीप में एक ग्लोबल डिवेलपमेंट प्लेटफॉर्म की मेजबानी करने की हमारी योजनाओं को जानेंगे।

रायसीना यंग फैलोज़ का तहेदिल से स्वागत। इस साल 29 देशों के 48 यंग लीडर्स यहां पधारे हैं — जो अपने देश की सरकार, मीडिया, व्यापार और सिविल सोसायटी के बेहतरीन प्रतिनिधि हैं। मुझे यह बताते हुए खुशी हो रही है कि इनमें आधे से अधिक युवतियां हैं। ये लगभग 1,500 पूर्व सदस्यों के लगातार बढ़ रहे नेटवर्क में शामिल हो जाएंगे, जिनमें से 100 से अधिक सदस्य इस साल फिर से हमारे साथ जुड़ने जा रहे हैं।

हमने इस मंच पर 200 छात्रों और युवा विचारकों को भी आमंत्रित किया है, जिनमें रूस का एक युवा प्रतिनिधिमंडल शामिल है। हम इस समूह का तहेदिल से स्वागत करते हैं और उस दुनिया के बारे में इनके विचार जानने को उत्सुक हैं, जो इन लोगों को विरासत में मिलने वाली है। हम अपने मंच को अलग बनाना चाहते हैं — हम इसे एक ऐसा स्थान बनाने की कोशिश कर रहे हैं, जहां युवाओं के विचार भविष्य में होने वाले विचार-विमर्शों को आकार दे सके।

हम इस साल रायसीना में होने वाली बातचीत और विचार-विमर्श में आप सभी का स्वागत करते हैं!

इस साल हम 80 से ज्यादा चर्चाओं का आयोजन करने जा रहे हैं: अगले तीन दिन तक 41 पैनल्स, 7 प्रमुख भाषणों, 3 अनौपचारिक वार्तालाप, 25 से अधिक स्टूडियो पैनल्स और 9 संबद्ध कार्यक्रमों का आयोजन किया जाएगा।

मैंने और मेरे सहयोगियों ने ऐसा वातावरण बनाने का प्रयास किया है, जो विविधता और प्रतिभा की दृष्टि से समृद्ध हो तथा चर्चा और विचार-विमर्श के लिए अनुकूल हो।

मुझे यकीन है कि अगले दो दिन जानकारी और उत्साह से भरपूर होंगे, और निश्चित रूप से उन प्रस्तावों और साझेदारियों के रूप में परिणत होंगे, जिनसें हमें हमारी गतिशील और जटिल दुनिया का मार्गदर्शन करने में मदद मिलेगी।

रायसीना डायलॉग 2019 में आपका तहेदिल से स्वागत है!

मैं प्रारंभिक उद्बोधन के लिए ORF के अध्यक्ष श्री संजय जोशी का स्वागत करता हूं।

Samir Saran| Terri Chapman|Mihir Swarup Sharma

Digital  transformations  are  rapidly  altering  the  nature  of  work,  models  of employment,    contracts,    regulations    and    protections.    Increasingly,    the responsibilities  of the state are becoming the obligations  of,  and a  business case  for,  the  private  sector.  This  devolution  of  ‘governance  responsibility’  is happening   at   a   rapid   pace.   In   many   locations,   this   coincides   with   the decentralization  of  political  power  to  local  administrations.  A  new  social contract  between  citizens,  consumers,  employees,  the  state,  and  enterprise is  needed  to  delineate  a  new  understanding  around  rights,  responsibilities and  entitlements.  As  a  step  towards  defining  such  a  contract,  we  set  out seven norms for defining these relationships in the digital age.

Attribution: Samir Saran, Terri Chapman and Mihir Sharma, “A New Social Contract for the Digital Age”, ORF Special Report No. 79, December 2018, Observer Research Foundation.

This report was first published as “A New Social Contract for the Digital Age”, in G20 Insights, 30 May 2018.

Challenge

The  disruptive  potential  of  rapid  technological  change  and  digitization  on employment,  job  creation  and  displacement,  employment  relations,  wages and inequality are immense and immeasurable.

Automation     is     challenging     predominant     conceptualizations     of     the workplace   and   workforce,   as   tablets   and   phones   replace   factories   and offices,  and  gigs  replace  full-time  jobs.  There  is  every  reason  to  suppose that,  in  a  business-as-usual  scenario,  this  trend  will  not  just  continue  but accelerate.

In  this  evolving  economic  structure,  an  individual  is  a  citizen,  but  also  a consumer, a capital-owner, an entrepreneur, an employer and an employee. The   borders   between   these   roles   are   no   longer   sharply   defined;   the traditional      relationship      between      employers      and      employees      has fundamentally  changed.  The  historic  model  of  employer-provided  social assistance  must  be  adapted  to  account  for  this  new  dynamic,  and  a  new point of provision of social protection needs to be identified.

Non-Atlantic G20 countries have extensive experience in grappling with the realities  of  informality  and  non-standard  forms  of  employment.  It  is  useful therefore  to  examine  the  contours  of  the  support  that  these  states  are attempting  to  provide  workers  as  an  approximation,  however  imperfect,  of the benefits traditionally provided by formal-sector “regular” employment.

Erstwhile responsibilities of the state are now an obligation of, and business case for, the private sector. The needs of individuals today are disparate and   heterogeneous,   and   may   no   longer   be   met   just   through   large investments  in  physical  or  social  infrastructure,  and  are  increasingly  being addressed   through   niche   solutions   best   offered   by   private   enterprises. Mediating  this  new  dimension  of  the  relationship  between  individuals  and the   private   sector   will   require   a   clear   delineation   and   devolution   of responsibilities and recourse.

At  the  same  time,  the  atomization  of  work  has  constrained  the  extent  to which  individuals  can  organize  and  make  demands.  The  collectives  and unions  that  traditionally  acted  as  arbiters  for  the  interests  of  a  substantial stakeholder   group   are   increasingly   ineffective.   Therefore,   there   is   an additional need for a new guarantor of the relationship between individuals and    the    private    sector    that    provides    for    purpose,    paychecks,    and protections.

This  new  guarantor  is  unlikely  to  be  any  single  agent,  actor,  rights  group, government  agency,  enterprise  or  regulator  as,  (a)  the  highly  amorphous emerging work landscape will demand flexibility, institutional innovation and informality,  and  (b)  swiftly-evolving  technology  will  continue  to  challenge the   capacity   of   legislation   and   laws   to   remain   meaningful.   Therefore elucidation  of  principles  and  norms  that  must  govern  the  new  operational relationships becomes compelling. These, in part and whole, must guide the plethora of relationship and laws that are defining the new workspace.

As a starting   point,   there   are   seven   norms   that   should   be   central   to governing these new relationships.

Proposal

1.  From the Job Security to Economic Security: A new ‘formality’

Digitization  is  enabling  unpredictable  transformations  in  work  across  G20 countries  and  beyond.  One  result  of  this  is  that  the  relationship  between employers and employees has fundamentally changed, and so too have the responsibilities  borne  by  employers.  While  a  future  social  contract  may  not be  able  to  credibly  promise  job  security,  it  should  be  able  to  guarantee social and economic security. That is, the financial security (paychecks), and social security (protections) that were previously provided by full-time jobs, must now be provided through alternative means.

The experiences of emerging G20 economies in contending with informality and  constructing  approximate  securities  for  the  informal  workforce  should inform such transformations in more advanced G20 economies.

Norm: A new ‘formality’ must ensure social and economic security.

Corollary: Responsibility for economic and social security must be explicitly assigned.

2.  From the Factory to the Cloud: A New Point of Provision

All  G20  states  have  some  form  of  welfare  system.  The  predominant  model for providing this is by linking benefits – whether forced saving or access to pensions   and   healthcare – to employment   status.   The   binary   between employment and unemployment is, however, quickly becoming irrelevant.

Indeed, an individual can simultaneously have a low-paying open-ended job with   employment   protection,   a   more   lucrative   part-time   job   with   no employment  protection,  and  an  entrepreneurial  venture.  Welfare  systems based  on  a  job/no-job  binary  and  the  workplace  as  the  point  of  provision are too restrictive to account for the variation and variability in employment that  are  characteristics  of  work  today.  Social  benefits  should  no  longer  be linked   to   a   specific   job   but   available   to   individuals   regardless   of   their employment status.

In  countries  such  as  India,  this  has  long  been  the  subject  of  government plans – see for example the 2006 Report on Social Security for Unorganized Workers.^[i]  There  was  an  initial  attempt  to  turn  these  recommendations  into law  in  2008,  another  such  effort  is  currently  underway.^[ii]  These  endeavours essentially follow the trail blazed by South Africa, which wrote rights-based social protection for all workers into its constitution in the 1990s.

Moving away from a fixation on employment status and employer-provided assistance would enable a large ‘formalization’ of workers who currently fall through   the   cracks   of   a   rigid   system   that   does   not   account   for   the complexities  and  dynamic  nature  of  work.  This  would  require  a  new  form and mechanism for the provision of rights, as well as a different, diffuse and accessible point of provision.

Norm:  Entitlements must be linked to individuals rather than to jobs.

Corollary: Entitlements, like rights, must be available to individuals regardless of their formal employment status.

3.  From Atomization to Solidarity: Constructing Co-operative Networks

Labour  unions  and  other  collectives  that  previously  provided  platforms  for organizing   and   arbitration   for   a   substantial   share   of   the   workforce   are becoming   less   important   as   the   workforce   becomes   more   atomized. Collective   organizing,   bargaining   and   mobilization   –   the   mechanisms through  which  workers  has  historically  made  demands  –  is  exceptionally difficult to exercise for fragmented contract workers and the self-employed.

Employment  status  shapes  the  extent  to  which  labour  laws  are  applicable, the  access  that  workers  have  to  labour  unions  and  to  each  other.  The individualization   of   labour   therefore   affects   the   power   of   workers,   by constraining their ability to connect and organize.

State    policy    and    private    sector    choices    should    actively    aid    in    the construction    of    cooperative    networks    rather    than    hoping    that    new technology   lets   individuals-as-workers   create   them   for   themselves.   The private sector will have to accept that, while an organized workforce is one better  able  to  bargain,  an  atomized  potential  workforce  is  one  that  will  not be able to innovate or increase productivity through learning by doing.

Norm: Enabling  mechanisms  of  solidarity  must  be  a  priority  of  the  public and private sectors.

Corollary: The  individualization  of  labour  should  not  result  in  the  loss  of mechanisms for collective bargaining.

4.  From Static to Dynamic Careers: Enabling Individual Transitions

New  forms  of  employment  may  not   meet  the   expectations  of  aspiring young  people  or  of  the  existing  workforce  that  is  being  forced  to  adapt  to changing  technology.  Young  countries  such  as  India,  where  more  than  half of the  population  is  below the  age of 25, must find  ways  of  employing and protecting  its  young  workers  –  but  will  also  need  to  find  ways  to  manage and  meet  their  expectations  and  ensure  purpose.  Similarly,  advanced  G20 economies  with  ageing  populations  may  need  to  examine  how  to  meet  or moderate  the  expectations  of  life-long  workers  who  are  being  rendered unemployed or unemployable by technological change.

One aspect of this is that the nature of employment as it pertains to the life- cycle    has    changed.    The    traditional    (and    often    preferred)    model    of employment means that we move from education into work, and then into retirement,  with  few  transitions  in  between.  The  emerging  model  looks profoundly different, in which we move in and out of education, and in and out of jobs, with an average tenure of employment of around 4.2 years.^[iii]

The  job  security  of  the  previous  model  must  be  replaced  by  a  security infrastructure  defined  by  ample  learning  and  skilling  opportunities  that  can assist  individuals  in  the  transitions  inherent  in  the  new  model.  States  will have to recognize that youth populations without the purpose provided by occupational  choice  will  seek  other  and  potentially  more  divisive  forms  of identity.

Norm: The public and private sectors must play a central role in supporting lifelong learning and career transitions.

Corollary: Skilling,  upskilling  and  reskilling  efforts  must  be  both  recognized and provided by employers.

5.  From the Digital Divide to a Digital World: Universalization of Access

Internet  access  and  use  are  becoming  essential  for  exercising  one’s  full citizenship,   as   public   goods   and   services   are   gradually   being   provided online;  and  also  for  income  generation,  as  opportunities  too  are  gradually requiring   some   level   of   digital   fluency.   Without   the   universalization   of access  to  the  internet  and  devices  –  and  the  ability  to  use  them  –  the  risks of  increasing  inequality  within  and  between  G20  countries  and  beyond  are stark.

The public and private sectors must therefore ensure the universalization of access  to  the  internet  and  ensure  quality,  security  and  affordability.  The provision of access should be seen as a public good, which can be provided in co-operation with the private sector. It is the responsibility of the state to incentivize  the  private  sector,  and  to  develop  the  necessary   regulatory enablers.

Norm: The  public  and  private  sectors  must  ensure  the  universalization  of internet access and digital literacy.

Corollary: Digital  divides  in  quality,  affordability,  access  and  security  both between  advanced  and  emerging  economies  and  within  countries  must  be addressed.

6. From Subsidies to Opting In: A New Responsibility for Wage Earners

Previously,  individuals  in  many  economies  relied  on  services  such  as  health and education being provided or subsidized by their employers. Workers in informal or gig-based sectors now have to make an active choice to access such  services.  Without  effective  incentives  (as  well  as  affordable  access), there is a risk that individuals will increasingly forgo these options.

This  is  profoundly  changing  the  relationship  between  wage  earners  and their  dependents,  as  the  option  for  accessing  basic  services  can  now  be forgone.  The  obligation  of  wage  earners  has  therefore  changed:  as  the ecosystem  of  support  for  dependents  dissolves,  individuals  must  seek  out or  opt  in  to  basic  services.  This  will  be  a  challenge  both  for  advanced economies with ageing populations, and young populations alike.

Norm: The state must provide effective incentives to individuals to opt in to increasingly choice-based basic services.

Corollary: Basic  services  must  be  accessible,  affordable  and  attractive  in terms of quality.

7. From Regulation to Devolution: A New Role for the Local

Increasingly, the private sector  is charged with  activities in  the provision of public  goods  and  services  that  were  previously  the  domain  of  the  state  – especially   as   the   notion   of   “public   good”   expands.   Simultaneously,   the collective    organizing    potential    of    an    atomized    workforce    is    being constrained,    requiring    a    new    guarantor    of    the    relationship    between individuals  and  the  private  sector.  Individuals  themselves  will  participate  in the  new  economy  under  many  different  guises  –  as  entrepreneurs,  savers, investors  and  workers  –  rendering  the  management  of  these  economic interactions    complex    and    difficult    to    manage    by    detached    national regulators working in silos.

At the most basic level, greater responsibility in governing this relationship, which   is   underwritten   by   a   new   dynamic   should   be   given   to   local government,  which  is  best  positioned  to  arbitrate  the  above  relationships. Within  the  confines  of  a  national  policy  framework,  local  government  can ensure compliance, audit, provide licensing and address grievances inherent in the new relations outlined above.

Norm: Local governments  must be  empowered to  mediate  the relationship between the private sector, employees and citizens.

Corollary: Local   government   must   ensure   accountability   of   the   private sector in its area of operation, and recourse for individuals and employees.

CONCLUSION

Digital  transformations  are  redefining  models  of  employment,  employment contracts  and  relationships,  regulations  and  social  protections.  Automation is  changing  both  the  workplace  and  work  itself,  as  workplaces  shift  from factories to phones, and full-time jobs transform into gigs. This necessitates a   restructuring   of    the   dominant   model   of   employer-provided   social protection,  and  the  definition  of  a  new  point  of  provision.  Non-Atlantic experiences    in    contending    with    informality    should    be    drawn    on    in approximating   the   social   security   (protections)   and   economic   security (paychecks) normally provided by formal, full-time jobs.

The  private  sector  is  taking  on  a  more  profound  role  in  the  provision  of public   goods   and   services,   enabled   in   part   by   new   technology-driven solutions.   Simultaneously,   the   individualization   of   the   labour   force   is challenging  the  mechanisms  through  which  individuals  can  express  their needs  and  demands.  These  two  phenomena  demand  a  new  guarantor  of the  relationship  between  the  private  sector  and  individuals,  the  devolution of responsibilities, and clear recourse.

No  single  agent  is  positioned  to  provide  this  role  of  guarantor,  since  it requires   flexibility   and   innovation.   Thus   instead   of   a   structure   imposed externally  or  from  precedent,  a  new  normative  framework  for  governing these  relationships  is  needed.  The  above  norms  are  a  starting  point  in outlining a such a framework.

To read the full issue, click here.

Samir Saran| Sushant Sareen

The views expressed above belong to the author(s).

Samir Saran|Aparajit Pandey

This Global Governance Working Paper is a feature of the Council of Councils (CoC), an initiative of the Council on Foreign Relations. Targetting critical global problems where new, creative thinking is needed, the working papers identify new principles, rules, or institutional arrangements that can improve international cooperation by addressing long-standing or emerging global problems. The views and recommendations are the opinions of the authors only. They do not necessarily represent s consensus of the CoC members, and they are not the positions of the supporting institutions. The Council on Foreign Relations takes no institutional positions on policy issues and has no affiliation with the U.S. government.

Read the full article here.

Samir Saran| Nikhila Natarajan| Madhulika Srikumar

Industry leaders and politicians the world over are scrambling to lead the development and use of artificial intelligence (AI) for the power and value it accrues. However, AI promises to implicate more than just politics and economics. It poses fundamental questions on how societies and communities will be organised in the future–capable of radically transforming workforce and work-life as we know it.

While some countries are beginning to explore the competitive advantage across the full spectrum of AI deployment; others are studying the potential benefits that this predictive technology can offer. Even as governments may be unaware of what the full connotation of AI might be, they are determined to drive the debate and deployment around this new suite of technology and life. If governments are unable to foresee changes in the jobs landscape that the technology will bring about — and fail to deliver on its responsibility of providing opportunities for its people, especially the youth — they will have to bear the political backlash.

In the last 24 months alone, more than a dozen countries have devised national strategies on AI; many of these tomes run into several hundred pages. This publication examines 12 of these national strategies: the US, UK, EU, Germany, South Korea, Singapore, India, France, China, Canada, UAE and Japan.

To read the full brief, click here.

Original Interview with RT can be found here : 

India is buying Russia’s S-400 air defence system, and only recently the USA sanctioned China for it. What can India expect now?

Given President Trump’s rather vague response on the question of exemptions for India, it is clear that the foreign policy establishment in Washington is still uncertain on how to proceed.

Having said that, India is both an attractive market for American arms dealers, and is the lynchpin of America’s ‘Free and Open Indo-Pacific’ strategy. Both weapons manufacturers and the strategic community in Washington will probably weigh in favour of India.

Whatever the near term consequences for India, therefore, Washington will be compelled to accommodate India’s interests in the long term.  

What are the military reasons for India to want to buy the S-400 from Russia at all?

The S-400 is a sophisticated anti-access/area denial missile system—a platform that no other country is likely to provide India, not even Washington. It will act as a crucial force multiplier in India’s border areas.   

In addition to signing the S-400 agreement, economic and energy policy decisions were also taken. What was discussed in detail and what was agreed?

For me, the important takeaway was Russia’s offer to allow India to participate in energy and trade projects in the Arctic. This is an emerging, if often ignored, theatre of geopolitics. There will be a race to exploit the regions commercial opportunity and to define its governance architecture. It remains to be seen what India’s response to this will be. I hope the mandarins in New Delhi see the strategic importance of being a stakeholder in this geography.

What are the geopolitical considerations of the USA be if they were to make an exception in the case of India with waiver? After all, India is one of the most important geopolitical players in the Sino-Pacific region alongside China and Russia.

In the long term, India is an invaluable partner for Washington. Indeed by mid-century, India will emerge as one of the world’s largest economies—a process that will foster a gradual and organic rise in its strategic capabilities.

Two expectations will underpin Washington’s’ choices going forward. First, that investing in India’s defense industry will help Delhi balance China’s rise in the Indo-Pacific. And second, that India will eventually be able to anchor democratic norms and free trade in Asia by its own desires and design.    

Some analysts claim that Russia is gradually beginning to change its position on the Kashmir issue because of growing cooperation with Pakistan. To what extent is this true and is there a realistic chance that India will politically prefer Russia to the US in the future?

Russia is not changing its position on Kashmir—Moscow’s courtship of Pakistan is based on two realities. First, that Pakistan will remain an interlocutor in Afghanistan, and will be important to Russia’s ambitions in Central Asia. Second, geopolitical equations in the region are changing rapidly— and just as India is reaching out to new partners, so is Moscow.  

It is too early to pass judgement on these evolving partnerships. They are often driven by near term interests and global political uncertainty. It is very unlikely, however, that Russia will upset India over a highly sensitive issue like Kashmir.  

India will not politically prefer Russia to the US—rather it must learn to work with both. In the Indo-Pacific, India’s equities lie with Washington, who’s economic and security presence can balance China’s rise. In Eurasia, Moscow will be its most important partner.

Meanwhile, the arch-enemy of India, Pakistan, is separating itself from the USA and is cooperating ever more closely with China, a close partner of Russia in turn. How does growing Russian cooperation with these two states affect the regional dynamics and decision-makings in India?

In the face of American sanctions, Russia’s only real choice is dependence on and partnership with China. While the close partnership between Moscow and Beijing certainly poses a problem for India, Moscow must also introspect on the sustainability of its arrangement.  

Russia should be anxious about being economically and militarily displaced by China in Central Asia and Eastern Europe. The fact is that if Moscow seeks a multipolar Eurasia, it will have to bring India into the arrangement or risk acquiescing to China’s design.

India is cooperating closely with the US in Afghanistan to keep the Afghan government alive against the Taliban. What role does India’s position in Afghanistan play in the talks between Putin and Modi?

While both countries agree that peace in Afghanistan is a priority, they differ over political arrangements that need to be made. Further, with the US, Russia, China, Iran and Pakistan all in the mix, the situation in the region remains complex.

With Putin, India likely reiterated its long standing position that any initiative in Afghanistan must be led by the government. India might have also pushed forward the agenda agreed upon in Sochi—of pursing joint development projects in Afghanistan with Moscow.  

Last year Russia called on India to join China’s Silk Road Project. India, however, seems to have reservations. This is mainly due to the China-Pakistan Economic Corridor (CPEC). For what geopolitical reasons does India reject a mega-infrastructure with China because of its cooperation with Pakistan?

CPEC is one amongst many objections that India has about the Belt and Road Initiative. The real issue, however, is that the BRI is a project designed, funded and executed only by China. As a key actor in the Asian century, India cannot allow China to dictate the terms of Asia’s governance.  

China must adopt a more multilateral playbook if it wants Indian support for the BRI. India and other Asian powers must have a legitimate voice in creating the rules and institutions of the region and in benefitting from the commercial and trade opportunities.   

Samir Saran

For the past seven decades, the world has been moulded by a strong, transatlantic relationship with the US and EU underwriting the terms of peace, stability and economic prosperity.

The success of this order has created its own existential challenge. Its rising beneficiaries in Asia and elsewhere increasingly challenge the validity of these arrangements and the efficacy of rules that have managed global affairs. While the historian John Ikenberry described the liberal world order as a “hub and spoke” model of governance, with the West at its centre, it is now clear that the peripheries of the system are developing wheels and engines of their own.

Indeed, the rise of Asia as a whole is recasting the physical and mental map of the world. Proliferating transnational relationships and new flows of finance, trade, technology, information, energy and labour have created three new strategic geographies which are already escaping the shadow of transatlantic arrangements. They essentially represent the collision of erstwhile political constructs – and their management requires new ideas, nimble institutions and fluid partnerships.

The Indo-Pacific

The first collision, which is already well underway, is the union of the Indian and Pacific Oceans. Popularly defined as the Indo-Pacific, it is a construct encouraged by the rise of China but defined in equal measure by regional actors responding to Beijing’s proposition. Maritime Asia is now larger than the US, ASEAN and China – earlier organized under the Asia-Pacific construct. Its frontier is not limited to the eastern Indian Ocean. From Nantucket to Nairobi, conversations on security, development and trade in this region will now include actors from three continents.

Eurasia

The second is the conflation of Europe and Asia into one coherent strategic system: Eurasia. This is an old idea, steeped in history, but it has a new vocabulary. The interaction of markets and communities from these once separated geographies is creating a new super-continental-sized interdependence.

Yet this interdependence is not without friction: China’s shadow looms large over Europe and its promise to underwrite the continent’s prosperity has proved too difficult to resist. Moscow, meanwhile, is exhibiting a new zeal to reclaim its place as the archetypical Eurasian player and members of NATO continue to bicker over their future role in the region. As these geopolitical tectonic plates both clash and merge, it is clear that East and West will set new terms of engagement.

The Arctic

And finally, we have the Arctic. Born as an unintended consequence of climate change, this geography will, for the first time, merge the politics of the Atlantic and the Pacific, even as it stimulates a clash between the arrangements that exist in these regions. The Northern Sea Route has been a tantalising theory; global warming is renewing it as reality. The global shipping giant Maersk, for example, completed its first voyage unassisted by ice-breakers this August (even though the company expresses scepticism about the near-term viability of the route). The emergence of this geography, however, will be far from frictionless and may well create a new distribution of wealth and power in the region.

While most Western governments currently share Maersk’s ambivalence, Moscow and China are investing heavily in building commercial infrastructure, naval capacity and military capabilities. As part of its Polar Silk Road ambitions, in fact, Beijing now actively encourages its enterprises to utilize the Northern Sea Route. Additionally, de-facto control over shipping routes in the region currently rests with Moscow, which has arrogated the power to grant shipping permits – a position that American officials have already warned might contravene the UN Convention of the Law of the Seas. In 1956, Britain went to war with Egypt to regain control of the Suez Canal; without appropriate arrangements for Arctic governance, history may well repeat itself a few latitudes north.

Today, this change is likely to be gradual, interdependent and evolutionary. There will be no single defining moment when a new order will be born. Instead, global politics will operate in 50 shades of grey for the foreseeable future.

As these three geographies discover themselves, then, there are five trends that deserve attention:

1. The the risk of separate cold wars across geographies. Unlike the 20th century, this tension will not be bipolar and each actor’s motivations, means and goals will differ. Whether it is the Himalayan cold war between India and China, the Arctic chill between Moscow, Europe and Washington, or the Mediterranean melee between the EU and China, multiple powers will exercise influence over these geographies and will compete at the intersection of social, commercial and military domains.

2. More “coalitions of convenience” are likely to emerge across these geographies. In an uncertain and fluid world order, issue-based partnerships may well have outsized influence over certain conversations. Russia, for example, is entering the fray in Afghanistan after nearly three decades with help from Iran and China, while India and France are cooperating on maritime security and development. China is partnering with Greenland – amid much anguish in Denmark – to cement its Arctic claims. If global institutions fail to manage emerging geographies, such coalitions will likely multiply.

3. The possibility for new institutional dialogues. Already, the EU is claiming a stake in the Indian Ocean Rim Association and ASEAN states are making overtures to the Arctic Council. These actors and organizations are transcending their 20th-century mental maps in search of new commercial and strategic opportunities. It is not entirely inconceivable that NATO and the Shanghai Cooperation Organisation (SCO), for example, might one day have a conversation on Eurasian security and connectivity.

4. The opening up of the Arctic will test the ability of powers to provide security as a public good in other parts of the world. In other words, with geostrategic conduits like the Suez Canal and the Malacca Straits possibly approaching their expiry dates, the imperative to secure Arctic sea lanes may well leave erstwhile routes bereft of powers willing to protect them. Are parts of the Indo-Pacific and Eurasia, then, destined to become ungoverned spaces – as in the Gulf of Aden – or will regional powers craft an arrangement of their own?

5. Finally, the institutional matrix will also evolve in response to these changes. It is clear that existing international institutions do not fully respond to the needs of developing countries and emerging regional powers. Which institutions, then, will be critical to these geographies? Will the Asian Infrastructure Investment Bank (AIIB) usurp the role of the World Bank in Asia or will new multilateral propositions emerge from countries like India, America and Japan? Will the UN be central to conversations on peace and security, or will regional institutions like the SCO (perhaps in a different guise) and the Arctic Council strengthen their own norms and rules?

In the 20th century, multilateral institutions were perceived to be mitigators and managers of conflict. That conventional wisdom may be turned on its head now, given that competing centres of power will, for the first time since the Peace of Westphalia, create their own institutional arrangements for exerting influence. An organization like the SCO, may, therefore, posit itself as the guardian of Eurasian stability, in contrast to an OSCE or NATO, that has hitherto played this role.

How nation states imagine the world is significant; their mental maps dictate diplomatic priorities, economic partnerships and security arrangements. The collision of new geographies is compelling states to reimagine their worldview.

In the 21st century, East and West are meaningless constructs. More important is how actors and institutions resolve the contradictions that will inevitably arise in Indo-Pacific, Eurasia and the Arctic. This is that strange and rare moment when global governance is more than the sum of its parts or individual regional configurations.

This commentary originally appeared in World Economic Forum.